Service charge actuals information

When we send out our service charge actuals statements we receive a lot of enquiries. We aim to get through these as soon as we can.

To help answer some of your questions we've included information below to help you understand your service charge statement. The information won't answer  specific questions relating to your service charge account, but they will provide general guidance.

The letters we sent recently do not relate to the rent and service charge increases applied in April 2023.

Service charges higher than expected and service charge estimates

If you think any costs were higher than you expected, we can send you a breakdown of your service charge costs. This would let you know specific details about your service charges.

Here we explain how the service charge process works, and why your actual costs can be different from your estimated costs.

Each year we issue estimated costs for the financial year ahead. This is sent to you before April and the beginning of the 2022-23 financial year.

Our estimates are based on recent costs – often over the previous three years. Our contractors, managing agents and our own caretaking and grounds maintenance colleagues will tell us how much they anticipate their costs to be over the coming year too.

We aim to make our estimated service charges as accurate as possible, but it is not always possible to get these right. Additional repairs, cleaning or grounds maintenance may be needed to bring the building or estate up to standard, these can make costs higher.

Once the financial year has ended, we have six months to provide you with your actual costs. We add up costs from any services and repairs to get your actual costs. We then compare your actual costs to your estimated costs.

By the end of September, following the end of the financial year, we write to you with details of your actual costs. This lets you know of any underspend or overspend.

If there was an overspend on services at your property, you'll owe us more money and we'll apply the deficit (overspend) to your service charge account. We can set up an arrangement or payment plan to help spread the cost.

If there was an underspend we'll apply a credit to your account and arrange a refund.

The above process (known as a “variable services charge”) is common to many English leases, including yours. Further details about this can be found on this link from the Leasehold Advisory Service website.

We're unable to provide your actual service charge costs any sooner than we do. We have a large number of bills, invoices and accounts to go through. We add up to get your actual service charge costs. We make sure we meet the legal requirements to provide you with information about your actual costs with 18 months of bills being incurred.

When this financial year ends (April 2023 to March 2024), we'll calculate any costs for the year and send you your actual costs in September 2024.

Breakdown of service charge costs

We receive a lot of requests asking for more detail on service charge costs, particularly when there has been an overspend. We're working through these requests as quickly as we can.

We aim to respond to you within 28 days. We will not ask you for payment until we have responded to your query in full.

Arrangements and payment plans if we spent more than we estimated

You may have received a letter from us saying we had to spend more than we estimated on services around your property. It may be that your financial circumstances do not allow for a one-off payment.

If this is the case, we can create a payment plan for you by adjusting your Direct Debit. This will spread the cost over the remaining months of the financial year (up to March 2024). You do not have to do anything now. We will contact you to arrange this over the next few weeks.

Refunds and credit on your account if we spent less than we estimated

If there's a credit on your account. This means we spent less than we estimated on services and repairs around your home.

If you have requested a refund, we're working our way through these requests.

Where we have your bank details on file (because you pay by Direct Debit) the refund should arrive in your bank account within ten days.

I moved in after 31 March, is this bill for the previous owner

Once you have become the owner of a shared ownership or leasehold property you take responsibility for any bills that come in. This is the case even if you weren’t living in the property during the time period in question.

This is a standard aspect of leasehold law. You can find more detail about this on this link from the Leasehold Advisory Service website.

Usually the buyer’s and seller’s solicitors will be aware that there is the potential for a deficit on the service charge account. The buyer’s solicitor, acting in the buyer’s interest, should ask the seller’s solicitor to arrange to set aside a fund to cover any additional costs relating to the time the seller was in the property.

If you bought the property part way through, or after the year ended, please contact your solicitor to ask whether such a fund was set up.

If no fund was set up, it will remain your responsibility to pay for any deficit.

I received two copies of the letter

A technical issue happened when we printed the letters. This means some customers received two copies of the letter. We won't pass this cost on to you and we've taken steps to stop this happening again.